(chinadaily.com.cn)
Updated: 2008-05-08 09:50

China should increase the exports of rice and wheat to make more gains, as global grain prices jump to record highs, a think tank researcher said on Tuesday.

The government should ease restrictions on exporting rice and wheat, Yu Baoping, a researcher at the Development Research Center under the State Council (DRC), was quoted as saying by Finet.

Yu believes it’s an opportunity for China to encourage farmers to go back to tilling the land thanks to soaring food prices all over the globe. In addition, the profits from more grain exports can be used to improve irrigation systems and to set up a fund to deal with food crisis related issues.

The DRC will submit the proposal to the central government soon, according to Yu.

Global food prices are now at record high levels, with the rice from Thailand, a yardstick for global rice prices, currently selling at $1,100/ton, a 50% month-on-month growth.

Countries such as India, Vietnam and Brazil have cut food exports in order to ensure domestic supplies and curb inflation.

China’s government said it has enough grain reserves to keep food prices stable. "Our grain supply and demand is basically stable, our reserves are full, and we can ensure supply and stable grain prices," the National Development and Reform Commission (NDRC) said in a statement on Tuesday.

An annual export of 20 million tons is unlikely to threaten the country’s food security despite a decade-high inflation, Yu said.

But analysts said the government is unlikely to loosen its restrictions on food exports, as the country still faces huge inflationary pressure.

The Consumer Price Index, a key indicator of inflation, jumped to a 12-year-high of 8.7 percent in February, before easing slightly to 8.3 percent in March. Surging food prices accounted for most of the gains in CPI.